Contractual interest?

[chezt]

Bill there were two. This is one ..

 

GenuineAnswers - What is Annual Percentage Rate (APR ) ? How to calculate APR ? What are advantages and disadvatages of APR ?

 

This is the other I stared at for a while ..

 

APR in agreements

 

So if u go for a quick read now then - how long before you have a supa dupa spreadsheet prepared to work out my rates???

 

Shall I come back about 4pm today?! lol

 

ENJOY!

[bill-k]

Chezt - just expressing sympathy for you - hitting brick walls everywhere.

 

Thanks for the hardcore links - I'll lock myself away for a bit 8-)

 

Dunno about a spreadsheet, but I'll try and come up with something !!

 

Cheers, matey.

[sirowealot]

Chezt,

 

In your Genuine Answers link, I like the following statement after the APR Advantages bit

As you can see the above rates are all equivalent

:-) yeah, of course they are!!

 

I've always used the following calculation to convert monthly to annual interest rate (notice I don't say APR, "annual interest rate compounded monthly" or anything else like that as I honestly don't know what it converts to).

 

(1+0.018735)^12

where 1835 equals the monthly rate of 1.8735% (so 0.026 is 2.6% pm on the credit card statement).

 

Copy and paste the quote above into the google search box and it'll calculate it for you. Change the 18735 to whatever your monthly rate is, remebering to drop the "point".

 

The above quote gives 1.24949559, and by dropping the 1. you get 2494 etc or 24.94%. So 2.6% per month equals 1.36071863 or 36.07%. Not exactly as Chezt's APR stated on his statement, but certainly near enough.

 

I admire Glenn UK's tenacity at trying to get the calculations exactly right, but my (layman's) head hurts so I'm happy to get it nearly right... As I mentioned in an earlier post, I'm not out to screw the banks and I think that if a judge saw our feeble attempts at calculating interest rates he/she would probably find in our favour as long as we weren't too far out, and certainly under rather than over in our calculations.

 

I'll post my spreadsheet later... I'm not saying it's correct (it's bsed on one of Vamp's sheets but I've modified it to work out variable rates) but I'm hoping it's close enough. I'm happy to argue in court that it's the best I could do after doing a reasonable amount of research. I'm sure it's under-calculating (sorry Glenn ) but I'd rather it was this way... after all I'm still getting more than the statutory 8%.

 

SirOweALot

[sirowealot]

After writing the above, I did some further digging...

 

I used the interest rates from Chezt's Genuine Answers link above

APR advantages

Rate of interest can always be misleading. A ten percent annual interest can be made to look in thee different ways:

• 0.7974% effective monthly interest rate

• 9.569% annual interest rate compounded monthly

• 9.091% annual rate in advance.

As you can see the above rates are all equivalent but to a person who is a novice in finance it is totally misleading. APR helps to standardize how interest rates are compared, so that a 10% loan is not made to look cheaper by calling it a loan at "9.1% annually in advance"

(MY EMPHASIS IN BOLD)

 

Using my calculation from the last post I did this

 

(1+0.007974)^12

The answer is 1.09999816, or 9.9998%. Close enough to 10% APR as stated in the first line.

 

Does this help anyone? Certainly I feel better about using that calculation in my spreadsheet...

 

I should point out that I'm not an accountant, solicitor, bank manager or anything like that... these may just be the ramblings of a madman...

[bill-k]

Blimey - never again !!! Those links are scary

 

I thought I was being a bit of a geek 'til I went there. No more hardcore for me !!

 

Thanks, Sir, for your formula. As you say, if it's close enough, then it's close enough.

 

I've got some HBOS statements which show monthly AND annual rates together, and indeed, your formula concurs with these, as it does with your test above.

 

Well done, and thanks.

[chezt]

WOW SirOwealot that's fab that google calculation thingy ... I could kiss ya!

 

It makes soooooo much more sense now n I've tried it against some other rates n it's spot on! THANKS!!

 

Just a point - why would you not refer to it as APR? I've called it this in my letters ... Quote from one of my leters 'I also claim compound contractual interest at a rate of 18.94% APR as set out in the attached schedule of charges'

Do you think I'm wrong doing this?

[chezt]

Blimey - never again !!! Those links are scary

 

I thought I was being a bit of a geek 'til I went there. No more hardcore for me !!

 

PMSL - I won't hold out for the spreadsheet then! Don't need it now anyway thanks to Sir!

 

The brick walls are coming down ....

[bram stoker]

SirOwealot - any chance of sharing your spreadsheet? I'm interested in taking a peek.

[chezt]

Oh Vamp I'm following you.... quick Q while ur here!

 

I've used your wonderful spreadsheet to calculate comp cont int & notice that the daily rate in pence doesn't match the actual amount it adds on when I change the claim date (ie add on one day?)

 

I'm prob just being a thicko but could u let me know if this is right ... simple explanation please!

[bram stoker]

Oh Vamp I'm following you.... quick Q while ur here!

 

I've used your wonderful spreadsheet to calculate comp cont int & notice that the daily rate in pence doesn't match the actual amount it adds on when I change the claim date (ie add on one day?)

 

I'm prob just being a thicko but could u let me know if this is right ... simple explanation please!

Which number spreadsheet please?

[chezt]

Vamp I've posted in other thread - ur too quick for me whizzing round! lol

[bill-k]

Just a point - why would you not refer to it as APR? I've called it this in my letters ... Quote from one of my leters 'I also claim compound contractual interest at a rate of 18.94% APR as set out in the attached schedule of charges'

 

Do you think I'm wrong doing this?

 

Chezt, notwithstanding anything on those wretched hardcore sites, nor anything Sir has to say, my meagre understanding is that the APR rate is a way of expressing the actual amount of interest charged in a year as a percentage, so that consumers can make comparisons between accounts before "buying."

 

As such, it is technically not the actual rate used in calculating interest, which is usually slightly lower. However, we find ourselves using the APR rate when claiming, as that is the rate published by the banks. It would seem to be close enough to satisfy the Courts, so why go any further ?

 

It is probably best not to refer to it as "APR" in one's claim, as I don't think it is technically correct to calculate our interest directly from an APR, even though we are using the quoted APR rate for simplicity's sake. I have worded mine "...interest at an annual rate of xx.xx% compounded daily." I still used their quoted APR rates, but I just didn't call it that.

 

Hope that's of use !!!

[sirowealot]

bill-k,

 

...nor anything Sir has to say

 

Whilst I'm flattered that something I've said might actually make sense, I thought I'd better just reiterate that I've got no training in anything that would be useful on this board... I'm an IT Consultant, not an accountant or anything else, as such anything I say shouldn't be taken as correct, it's just my own particular grasp on it.

 

 

That said, I agree absolutely with the whole of your post above... APR is nothing more than a way of making numpties like us understand SLIGHTLY more just how much the banks are trying to drain every penny from us. I've used the phrase "monthly interest rate" and "annual interest rate" when I've written letters, that way they can be interpreted differently depending on one's needs. Again, you could argue that as a layman you don't know anything different.

[bill-k]

Agreed, Sir - we're all just pitching in with whatever we know or think we know, and taking away what we think we can use. We must all test & evaluate it ourselves, for ourselves, before we trust it 100%, as has been done here with the monthly-to-annual rate formula, I believe.

[chezt]

Cheers guys - I've evaluated your comments about wording & have duly removed 'APR' from my letters - I totally understand the reasoning

 

Letters done ready to post 2moro - wow today has been a productive day

 

Off to tip both ya scales now - least I can do!

[sirowealot]

cool... no-one's ever tipped my scales before... do I get a prize?

[bill-k]

cool... no-one's ever tipped my scales before... do I get a prize?

 

I've only just found out what all that's about, Sir !! You get brownie points, but I'm still waiting for my catalogue to find out what I can redeem them for !!

 

Cheers, by the way, Sir & Chezt. I've learnt some stuff, too !!

 

Clicks all round, then !!!

[chezt]

Pleased to oblige! I got a click this week too!

 

Bill - like the points catalogue idea ... wonder what I can get with my one!

[Glenn UK]

Pleased to oblige! I got a click this week too!

 

Bill - like the points catalogue idea ... wonder what I can get with my one!

 

Dont get too excited, its a bit like one of those catalogues you get with the sunday papers, so if you want incontinence pants youre ok, otherwise forget it.

 

 

Glenn

 

PS my wife does tell me the pants I got are better than the ones i used to wear but they leak overnight.

 

PPS #. Is this contribution worth a click?

[chezt]

Dont get too excited, its a bit like one of those catalogues you get with the sunday papers, so if you want incontinence pants youre ok, otherwise forget it.

 

 

Glenn

 

PS my wife does tell me the pants I got are better than the ones i used to wear but they leak overnight.

 

PPS #. Is this contribution worth a click?

 

PMSL @ ur pants Glenn! u mean I can save up for a pair of those slippers ... well I say pair but u actually only get one that's big enough 2 put in both feet ... handy for a nice cosy night in front of the tv with ur highlighter pen n old bank statements etc ...

 

As for the click ... think I already clicked u last week (& it was for something much more worth while than the pants post!)

[bill-k]

No click from me, Glenn - that post was utter pants.

 

R U taking the P or donating it ? :grin:

 

We're all POSL, here, and when you see some of the banks' antics, I think those pants are a useful idea - as is the big slipper, Chezt !! I'm told when you get to 1000 points, you have enough for one of those 4WD shopping trolleys to cart your documents into court with.

 

Ahem - all this piddling around has made a mess of your thread, Glenn, sorry. Better mop up & get back on topic - er, whatever it was...

[crashbandicoot]

"PS my wife does tell me the pants I got are better than the ones i used to wear but they leak overnight.

 

PPS #. Is this contribution worth a click?"

 

Ewwww Glenn, Far too much info for a Monday, thanks! PMSL (oops, I think I need one of those now!!!)

[Guest willowb]

PS my wife does tell me the pants I got are better than the ones i used to wear but they leak overnight.

 

PPS #. Is this contribution worth a click?

I wouldn't click you with a barge poll now:( LMAO

 

Wxx

[chezt]

Ahem - all this piddling around has made a mess of your thread, Glenn, sorry. Better mop up & get back on topic - er, whatever it was...

 

Yes I agree - this post has such a sensible title then all this happens .... we're not all here to have fun u know - this is sposed to be serious stuff! 8-)

 

If this post has helped in anyway - please click my scales ... *1000 points u say Bill?* ;-)

[chezt]

Oooh I've been clicked again!! 1000 points 'ere I come!